US media firm buys into The Hyperfactory

According to The Hyperfactory’s co-founder and regional new business director Geoffrey Handley (pictured), the deal was brokered to expand The Hyperfactory’s global reach and bolster Meredith’s digital capabilities worldwide.

Meredith, headquartered in Des Moines, Iowa, publishes women’s books, websites and magazines, with titles including Better Homes and Gardens, Ladies’ Home Journal, Family Circle and American Baby, and holds integrated marketing and interactive media agencies. It claims to reach 85 million Americans each month and posted 2008 annual revenues of US$1.6 billion.

The Hyperfactory, meanwhile, has offices in Auckland, Los Angeles, New York, Chicago, Hong Kong, Sydney and Hyderabad. In the past it has worked with several marketing agencies on high-profile mobile campaigns, including the award-winning ‘Say goodbye’ campaign for Motorola, conducted with Ogilvy Hong Kong. Key clients include Coca-Cola, BlackBerry, L’Oréal, Vodafone, Disney and Kraft, and it is currently developing mobile applications for Meredith’s media holdings.

“Meredith has been working for the past two years to strengthen its digital area,” Handley said. “In the last 18 months, it acquired a handful of digital agencies in the areas of search, healthcare, social media, CRM and now a deal in mobile with us.”

Handley added that The Hyperfactory has been “having conversations for the past two years with a range of holding groups - WPP, Publicis, Omnicom Group and the like,” but opted to partner with Meredith in order to “continue to maintain our autonomy”, saying the deal will not affect operations in Asia-Pacific.

“We want to work with the best brands in the world, and all the best brands in the world don’t work with one advertising agency, and working under a holding group would limit our ability to work with all brands,” Handley said. “We also looked at a number of digital specialists that have been bought by holding companies and they do not maintain the same shape or form as they had before joining.”

While the stake’s valuation has not been disclosed, Handley said a full acquisition of The Hyperfactory would fall into the top three technology-based equity deals in New Zealand.

The highest-valued deal in the market came in 2006 when Fairfax Media acquired auction site Trade Me for NZ$750 million (US$490.20 million), and the third-highest was Quest Software’s acquisition of Aftermail for NZ$65 million ($42.48 million).